The Baturaja II factory is now under construction here designed with a production capacity of 1.85 million tons a year, Pamudji said here on Monday.
The new factory built at a cost of Rp3.4 trillion, would be on stream by the end of the first half of 2017, Pamudji Rahardjo said in a statement.
The fund would be raised partly or Rp1.27 trillion from initial public offering (IPO), Rp1.3 trillion in loans and the rest to be put up by the company.
"Currently we are facing weak demand in the countrys cement market amid subdued economy . In the third quarter of 2016, the countrys total cement sales grew only 3.8 percent. Data from the Indonesian Cement Association showed that cement supplies in the country totaled only 43.1 million tons in the first nine months of 2016 . Meanwhile total consumption this year is estimated only 45.9 million tons," he said.
The condition put pressure on all cement producers in Indonesia. Meanwhile new factories are being built and to come on stream soon including those of foreign investors, he said.
New factories would increase the installed production capacity of the countrys cement industry to 77.62 million tons by the end of 2016 and to 96.23 million tons in 2017.
"PT Semen Baturaja (PTSB) is not an exception. It would not escape the impact. The pressure would not stop at that when in 2017 the Baturaja II factory starts commercial operation. The pressure would be heavier," he said.
However, the management of the company is confident with solid hard work the company would continue to perform well and would go through the difficulty, Pamudji said.
He said the performance of the company has won appreciation from the government and the public as well as from Infobank.